5,268 in Illinois get aid from foreclosure settlement

Provisions of the $25 billion national mortgage foreclosure settlement are making their way to homeowners in Illinois and elsewhere.

As of June 30, 5,268 Illinois homeowners have received more than $357 million in assistance as a result of the settlement reached in February to correct shoddy mortgage foreclosure practices with the nation's five largest mortgage servicers, according to a progress report released Wednesday by the independent monitor of the settlement struck between the servicers and the federal government and 49 states.

Almost half of those Illinois borrowers, 2,555, participated in a short sale of their home or completed a deed-in-lieu of foreclosure with their servicer. Others received loan modifications, principal reductions and loan refinancings.

Nationally, the five servicers -- Bank of America, CitiMortgage. Ally Financial, JPMorgan Chase and Well Fargo -- reported that they granted $10.56 billion of relief to 137,846 borrowers between March 1 and June 30. Almost $8.7 billion of that national relief involved about 75,000 borrowers either completing a short sale or a deed-in-lieu of foreclosure with their servicer, according to the report.

According to the state, Illinois ranks fourth in terms of the total number of borrowers who have received assistance.

"I am cautiously encouraged by the initial progress reported by the independent monitor," said Illinois Attorney General Lisa Madigan, who helped negotiate the settlement. "We're starting to see real results for Illinois families.

Joseph Smith, Jr., the independent monitor of the settlement, noted that the information has been self-reported by the companies and has not been audited or confirmed by his staff at the Office of Mortgage Settlement Oversight.

Mortgage servicers also improved their servicing practices. They have until Oct. 2 to comply with more than 300 standards.

Illinois also has begun disbursing its $106 million share of the settlement. On Tuesday, Madigan announced a $4.7 million grant to the Legal Assistance Foundation of Metropolitan Chicago to help it provide legal services to homeowners in Chicago and suburban Cook County. Last week, another $4.5 million was awarded to the Land of Lincoln Legal Assistance Foundation to help homeowners in central and southern Illinois.